To read the full version of this content please select one of the options below:

Signaling value of top management team: Evidence from Chinese initial public offerings on US markets

Muhammad Amin (Business School, University of International Business and Economics, Beijing, China)
Jianfeng Wu (Business School, University of International Business and Economics, Beijing, China)
Rungting Tu (College of Management, Shenzhen University, Shenzhen, China)

Chinese Management Studies

ISSN: 1750-614X

Article publication date: 13 May 2019

Issue publication date: 31 July 2019

Abstract

Purpose

The purpose of this paper is to integrate the upper echelon theory with signaling theory and examine the impact of top management team (TMT) on the initial public offering (IPO) performance of Chinese firms in the USA.

Design/methodology/approach

This study used Security Data Corporation (SDC) that is a central database for foreign IPOs in the USA. The authors identified 142 Chinese firms that issued stocks on the US markets between 2003 and 2014. This study used firm’s final prospectuses to collect data manually.

Findings

This study finds that the TMT characteristics such as functional heterogeneity and international exposure convey the positive signal of firm’s legitimacy to the US investors and increase the IPO performance.

Originality/value

This study extends the upper echelon perspective that has previously overlooked the signaling value of TMT characteristics in the foreign IPO studies. The top management plays an important role to the firm’s successful foreign market listing. Since China joined the WTO in 2001, a large number of Chinese firms have started IPOs in the USA, but there is a dearth of research on these firms. This study aims to contribute to the study of international business and management and describes that the TMT functional heterogeneity and international exposure have a significant role in the success of Chinese foreign IPOs.

Keywords

Acknowledgements

The authors are grateful for research support from the Fundamental Research Funds for the Central Universities in UIBE (CXTD7-03) and the National Natural Science Foundation of China (71772129 and 71572116).

Citation

Amin, M., Wu, J. and Tu, R. (2019), "Signaling value of top management team: Evidence from Chinese initial public offerings on US markets", Chinese Management Studies, Vol. 13 No. 3, pp. 531-549. https://doi.org/10.1108/CMS-04-2017-0097

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited